by Peerzada Arshad Hamid
NEW DELHI, April 11 (Xinhua) -- India has reportedly bought at least 13 million barrels of crude oil from Russia since Feb. 24, compared with nearly 16 million barrels in all of 2021, given the huge discounts offered by Moscow since the Ukraine crisis.
Crude prices are soaring in the international market with the Russia-Ukraine conflict unfolding. New Delhi has called for an immediate ceasefire in Ukraine but abstained from voting on multiple United Nations (UN) resolutions on the military operation despite growing pressure from Washington and its allies.
MORE RUSSIAN OIL
India is the world's third largest consumer of oil and imports over 80 percent of it from other countries to meet its needs. Last year, the majority of India's oil supplies came from the Middle East, followed by remarkable quantities from the United States and Nigeria.
In 2021, Russia only accounted for around two percent of India's total oil imports.
Following the West's imposition of sanctions on Russia, Moscow has been seeking new markets for its oil exports by offering discounts. Indian companies took advantage of the opportunity to increase imports from Russia and placed orders.
However, in the wake of the sanctions on Russian banks, these companies are facing a challenge of how to finance these discounted purchases.
In the recently concluded country's parliament session, Junior Oil Minister Rameswar Teli said that there was currently no contract or proposal under consideration of oil undertakings in the public sector with Russia or any other country to buy crude oil in Indian rupees.
Insiders say New Delhi and Moscow have been looking to establish a rupee-rouble trade system and discussions between financial officials from the two countries are ongoing. Other options for all possible payment mechanisms are also being explored.
The issue reportedly came up for discussion during Russian Foreign Minister Sergei Lavrov's recent visit to New Delhi, during which he also met with Indian Prime Minister Narendra Modi.
Lavrov's visit came just after British Foreign Secretary Liz Truss's visit and U.S. Deputy National Security Advisor Daleep Singh's visit to India, both trying to convince India against doing business with Russia.
INDIA'S DEFIANCE
Indian Finance Minister Nirmala Sitharaman recently said India will continue buying cheap Russian oil in the nation's interest.
"I would put my energy security first. If the fuel is available at a discount, why shouldn't I buy it?" Sitharaman said.
For this, Indian state refiners have been doubling down on Russian barrels.
"We have started buying (oil from Russia). We have received quite a number of barrels. I would think about 3-4 days of supply, and this will continue. India's overall interest is what is kept in mind," Sitharaman said of the contentious issue of oil purchases from Russia.
Reports said Moscow is offering more oil to New Delhi at a discount of as much as 35 U.S. dollars a barrel on prices before the conflict. Meanwhile, crude in the market hovers above 100 dollars a barrel.
The Indian finance minister's comments were seen as a reaffirmation of New Delhi's position on continuing trade with Moscow, despite Western sanctions.
Sitharaman also said that it would be better to have a Unified Payments Interface-like platform that can interact with another system, just like SWIFT.
Indian Foreign Minister Subrahmanyam Jaishankar also defends New Delhi's position saying that while India's crude purchases from Russia are insignificant, the major buyers of Russian oil and gas are from Europe.
"When the oil prices go up, I think it is natural for the countries to go out into the market and look for what are good deals for their people," he said in his remarks during a conversation with his British counterpart Truss, who was on a day-long visit to India as part of a wider diplomatic push on the Ukraine issue.
Analysts say buying crude at a discount can help India keep a check on prices in its domestic market to some extent.
Fuel retailers have started passing on high prices to consumers, putting pressure on the government to slash fuel duties.
U.S. CARROT & STICK
Washington has been trying to bring New Delhi into its fold. Initially, it said New Delhi's oil imports do not violate sanctions but actually it harbors grudges against New Delhi, which has so far remained neutral.
The White House, unwilling to see India increasing its oil purchases from Russia in defiance of sanctions, recently said that it was ready to support New Delhi in diversifying its energy imports.
"We do not think India should accelerate or increase imports of Russian energy and other commodities even as, obviously, those decisions are made by individual countries," White House press secretary Jen Psaki said at a news conference. "And (the U.S. is) also making clear that we stand ready to support India as in any efforts to diversify its imports and serve as a reliable supplier even as they're only importing about one to two percent of their oil from Russia."
On Wednesday, Biden's top economic adviser said the administration has warned India against aligning itself with Russia, and that U.S. officials have been "disappointed" with some of New Delhi's reactions on the Ukraine issue.
"Our message to the Indian government is that the costs and consequences for them of moving into a more explicit strategic alignment with Russia will be significant and long-term," White House national economic council director Brian Deese told reporters. ■